Behind the Bastards

There’s a reason the History Channel has produced hundreds of documentaries about Hitler but only a few about Dwight D. Eisenhower. Bad guys (and gals) are eternally fascinating. Behind the Bastards dives in past the Cliffs Notes of the worst humans in history and exposes the bizarre realities of their lives. Listeners will learn about the young adult novels that helped Hitler form his monstrous ideology, the founder of Blackwater’s insane quest to build his own Air Force, the bizarre lives of the sons and daughters of dictators and Saddam Hussein’s side career as a trashy romance novelist.

Part Two: Jack Welch Is Why You Got Laid Off

Part Two: Jack Welch Is Why You Got Laid Off

Thu, 11 May 2023 10:00

Robert is joined again by Michael Swaim and Abe Epperson to continue to discuss Jack Welch.

Cracked alums Michael Swaim and Abe Epperson are making a new movie and you can help! Papa Bear is based on the hilarious, poignant true story of when Swaim's Dad came out as a gay furry. Click here ( to learn more and score cool rewards like posters, special thanks credits, or even a trip to the premiere!

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Alright you sons of bitches, let's fuck this popsicle stand. It's time for a goddamn podcast. How was that? Everybody good? You were right past blowing it all the way to fourth base. Everybody happy with the popsicle stand. Yeah. I'm glad. I'm glad. I'm glad. Right now. Welcome to Behind the Bastards everybody. It's a podcast. Bad people. Talk about them. Yeah. It's a good time. So we should, you know, let's talk about this real piece of shit. This guy who sucked. CEO now of General Electric Jack Welch. So about a year into his tenure as CEO, Jack Welch gave a speech. By the way, my co-hosts as with the first episode. You were so impressed with your intro that you forgot to. I really thought I was going to be able to. She was incredible. It was great. I thought I could sleep through this one. But hi, we're Michael Swain. Hey, everything. Hello. Happy to be back for part two. Part two, baby. Well, I do want to get in here. We got again. What should people know about your current projects? Hey, I did it in part one. You do. Yeah. So basically, Michael and I are making an independent film. It's based on the time that Michael's father came out as a gay furry. Well, Michael was like a teenager. And we both thought it would be an interesting story to show that like on film, like as a coming of age, like sex comedy. So we wrote it and now we're producing it. And you can help us by going to seed and slash fund slash Papa, hyphen bear. And you can become a part of the movie. You can, you know, they got tears there. You can click on the button. And we're still great rewards. Yeah. Yeah. We're stoked about telling the story. So if you can help us out and we'll, you know, we'll make the film right. So that's why we're that's why we're here. No, no, no, we're here to catch up with Robert, which is always a divine pleasure. Well, not to, but you're also right. Both things are true. And the only thing I want to add is if you're not aware, Abe directed like most of the videos that cracked I was over at crack. If you know us from cracks, yeah. So, so like we can do it. I can say with great confidence, it'll be a good movie. I bet Robert would even back us up on that. So check it out over there where Abe said and if you're interested at all in that hook. Yeah. I am so excited for this movie. I enjoyed your, your, your previous movie. Kill me now. And I would like, I would like you to get another movie out. So listeners help make my dream come true by forcing Michael and Abe at gunpoint to make another film. Yes. Yes, Daddy. Yeah. Yeah. Hurt them. Hurt them for me. So back to the sentence I was in the middle of when I realized I hadn't introduced you about a year into his 10 year as CEO of GE Jack Welch gave a speech at a gathering of executives in New York City. It was meant to be his introduction to the company leadership where he would present them with his vision of the future and wrangle the most influential minds in the country behind his plans for or and get the most influential minds in the company behind his plans for GE's future. His 20 minute speech was titled Growing Fast in a Slow Growth Economy. And it presented a very menachine view of the country's economic future. From now on, companies would either be the dominant entity in their market or doomed to failure. Mediocrity, which he defined as not being first or second in the industry, would be seen as a death now. He announced that if GE couldn't guarantee itself that kind of dominance in one of its many industries or businesses, it needed to sell that business off or shut it down or otherwise prune it away in order to focus on the things that it could dominate. Now, one thing you might notice about this is that like as a consumer, theoretically, one of the big benefits of capitalism, one of the things that set it apart from, for example, the Soviet Union is that customers would have like choice between a bunch of different products. But Jack is saying, no, no, no, fuck everyone who's not like number one or number two. It's not worth being in that business. It's not worth making a simple profit in order to like provide people with options like fuck that. Right. I do love, I read a whole book on this that I can't go into because it's your show. But I love that he also is right that you have to have a second one and have fucking simple humans are because you're like, you're either someone who likes to do what everyone's doing or you're someone who likes to be contrarian and not do what everyone's doing. So you always get there's like huggies and panvers or coconut Pepsi. Yeah. And every like that's as big as our minds get is like, I'm a sheep or I'm an anti sheep. Those are the types of people that buy things. Yes. That's why anti sheep, anti sheep. This is why famously the one cultural reservoir our country had of anti capitalist thinking was in those brave heroic souls who rejected the Pepsi Coke dichotomy and instead switched to Dr. Pepper. Dr. Pepper. It's playing see baby. And that's when we got soda perfection in the Dr. Pepper. So really it's very funny when I'm anywhere else in the country as I'm usually am now, but Texas, I can like tell who's a Texan by when you go out to eat who gets a Dr. Pepper. Like if you're at a festival joint. Yeah. It's a thing. No one else drinks it but us. The rest of the country doesn't understand. Soren's a very famous. That's watching. But he's from Colorado, which is North Texas. That's right. Dr. Pepper. I think I also think that Dr. Pepper is the best version of diet. That's by imagining Jack Wells hearing you talk about Dr. Pepper and go. I'm assuming Dr. That's good. Dr. Well. I'm going to be honest with you both. I'm actually a Mr. Pibman. Oh, see the Contrary. Pib makes a fine soda. Look. I love that we're just doing free ads for soda. I tried to get us back on track. It is it's good shit. It is. Okay. Well, Mr. Pib is just like, excellency. Yeah. If Jack Welch had his way, there would be no Mr. Pib because it's too good a product to be number one or two in its category, right? This is the kind of hell he wants for us. There's only Pepsi and Coke. That's set of a bitch. So Welch's goal at C SEO as he told the audience in this speech was to make GE the most competitive enterprise on the planet. The steady growth that had made it the blueest of blue chip corporations prior to this was no longer acceptable. Welch had been inspired in this by a number of articles in Fortune magazine analyzing famous Prussian generals from the 1800s. And for some reason, trying to use them as business gurus, this has been like the last thing he read before giving the speech and a huge impact on like the way he framed everything that he was doing. And this is the kind of thing we see all the time. Is your like, how did some guy 400 years ago who murdered and raped everyone he met do it? That's probably good. Well, it's funny because like that didn't used to be the thing, like especially if you go back to, I don't know, like the 50s and 60s and you were to be like, we should take, you know, our management advice from military leaders. Well, for one thing, most of those guys fought in World War II and they'd be like, you mean the idiots who like got all my friends killed because they fucked up constantly? No, I think I'm good. I don't think that's like the management tactics I want. But by the time you get to the 80s, none of these guys have ever done anything in the world. And they're like, yeah, the fucking, you know, who's, you know, who's a management guru, Helmuth Van Moltke. That's a guy who knows how to run a company that makes light bulbs. The man who won the Franco-Pression War surely has wisdom for me in our plastics business. Like that's the most like fraternity sentence I've ever heard. It's very funny. It's it's it's it's seeped in it. And again, you could again, you get one of the other things you can tell us that like none of this generation of business leaders who are entranced by this stuff, not only were they like too young to fought in World War II, but they were too rich to get drafted for Vietnam because like nobody who fights in Vietnam is like, generals, the guys who don't make mistakes. Yes, I understand. It's the, it's like the eye of the hurricane saying like, this is all right. This is fine. Yeah. Let's, let's, let's, let's, what would West, what, how would Westmoreland run GE? You know, let's defoliate the entire business, poison the office, kill everyone. I shall run this condom factory as if I took a Machiavelli. You know, you do though. That's fine. You don't need to. I do kind of want to write a management book that's like the Westmoreland way and it's just like the applying the lessons of the Vietnam War to corporate success. Yeah. 100% serious. Yeah. Yeah. Well, why not? It could, it could work. So this is something that's starting to be a big deal in the 1980s. And I haven't found a, a copy of the articles and fortune that inspired Jack Welch so much, but I did run across a very recent article in the Harvard Business Review. We'll be talking more about the Harvard Business Review a little later written in the early 1990s, which was kind of like the heyday for Jack Welch's CEO that attempted to draw business lessons from one of the same generals featured in the fortune article. A guy I mentioned a little earlier, Helmeth Von Moltka. Now, the article also quotes Jack Welch, which is, you know, interesting by this point in time, 10 years later, not only is he like reading articles about Prussian generals and their management tactics, but he's been added to the articles about Prussian generals and their management tactics. Um, quote, Moltka possessed two important characteristics that made him a superior strategist, the ability to understand the significance of events without being influenced by current opinion, changing attitudes or his own prejudices, and the ability to make decisions quickly and to take the indicated action without being deterred by a perceived danger. The two characteristics support each other and apply to managers and entrepreneurs as much as generals and natural national leaders. For example, General Electric CEO Jack Welch has said, strategy follows people, the right person leads to the right strategy. Now, there's a lot that's funny about that. Well, yeah, it's, it's, I mean, first off, just nonsense. Like, von Moltka was not a great general, because he was great at, like, I guess you could argue those were factors in his success. Another factor is that Germany developed a kind of steel that allowed them to make long-range cannons that the French did not have, and so they were killed at extremely long range before they could close with their superior close-in rifles. But like, you can't really translate that to, to GE strategy very well. How a harsher that's what we need. Yeah. Also, you get the very clear impression, the Jack Welch definitely, at some point in his life, like, turned to his chauffeur was like, you are my friend. You're my best friend. Like, this guy, and why, and nothing. He exited the lawyer. Yeah. Yeah. Moltka, you know, again, was a very good general, but it's also kind of worth noting that those who see Vamoltka as a business guru should be aware that the, the men he trained, the generation of German commanders who like were raised up in kind of his heyday and like learned under him and were inspired by them. Were the guys who all lost World War One, destroying the first Reich in much of Europe in the process. So keep that in mind as we discuss the legacy of Jack Welch. But oddly enough, the same thing is going to happen. Now, one of the things that Welch took from Moltka was the concept of total war. He saw the business equivalent of this as being willing to find profit wherever he could, even though things traditional, even through things that were traditionally outside of GE's wheelhouse, when he delivered this wisdom in his big speech, the Wall Street analysts in the audience were baffled because this is insane, right? Like, people at the time were like, what the fuck is he talking about? Like, this is not like total war means, I don't know, burning down villages and destroying crops that the enemy can gain no sucker on them. It doesn't mean like finding profit in every aspect of your business. That's just running a business. Like what you're saying is just horse shit. Yeah, it sounds like you say my new brilliant business plan is I want money. What if we made money? Oh, but I really want money. Yeah, it's like if you had a general come in and was like, guys, guys, I got a new plan that's going to blow this whole war thing out of the water. What if we hear me out here, kill the enemy. However we can anyway you can as long as you're killing them. Yeah, I love the idea of him seeing like a little kid that with lemonade stands selling like 50 cent, you know, like cups of lemonade and he's like that little piece of that son of a bitch. I can be making win all of commerce total war this kid. Yeah, total war this little son of a bitch. It's interesting. I read a book when I was a lot younger, you know, the show band of brothers was about an actual like military unit in the US, a easy company. I think in the 82nd Airborne, I read a book by like the unit commander, who's the he's he's he's one of the characters in the in the show, but like by the actual guy. And there was like a point in it, a line in it where he was like, because I think he wrote it in like the 80s or 90s where he was like, I keep seeing people comparing like business to war and like using military metaphors to talk about how companies should be run. And I find it will it really off putting because like war is just like unhinged savagery and people shouldn't people shouldn't seek to emulate it in the other spheres of existence. Yeah, very fun. Jack Welch does not feel the same way. And I'm going to quote from the man who broke capitalism by David Gels again here. One analyst asked how the price for copper would impact earnings in the next quarter. What the hell difference will that make? Welch shot back. You should be asking me where I want to take the company. The speech was a flop as the analysts filed out of the ballroom one remarked. We don't know what the hell he's talking about because they want to know like so, you know, what he like how is the business doing? How are like, what is it? What is it? Yeah, I have like the costs of different materials that we need, gun up or down, you know, like how are hours? Like how is how are our core like assets performing right now? And Welch is like, fuck that. I'm going to talk about war. Right. It's crazy how like this type of thinking like any given day he could be like, lauding the like, oh, we got to we got to like short the system and create this like essentially new market that we can scam. That's the new hotness. And then the next day he'll be like steady growth and like quality products are the thing to do. It's like, who knows what this guy's going to he's just a child walking around pointing at this is the strategy, I think. Yeah. And you can feel him setting the template that I think a lot of modern CEOs follow that is just your job is to be a figurehead and give speeches that are general about vision and direction. And basically just demand that the number go up. Like your main job is to yeah. And that's the like as a spoiler where we're heading here is that he's kind of running a con. And it's a successful con. It does make GE incredibly profitable. But the reason he can't talk to these guys about the business is that he wants to eliminate the business part of GE because that's getting in the way of making money. So today is the story of how he did that. The first big campaign that general jack had to launch in order to remake GE in his image was what he himself described as the campaign against loyalty, right? He declared war on the concept of loyalty within the company. He defined this. Well, we're talking about that. He defined it as eliminating bureaucrats. But in reality, his layoffs were more or less agnostic to function or performance within the company. He fired good employees if they annoyed him. He wants shut down an entire department dedicated to long term planning because long term planning isn't the kind of thing that leads to short term earnings. Sooner became known that the only way to advance under GE's new leader was to fire as many of your own employees as possible. True to his background as an angry man who never learned how to compromise or experience consequences, Jack managed mostly through screaming at people. There were some upsides to this. He legitimately knew his business very well and he would tear his managers a new one if they didn't understand their business as well as he did. But it also selected for people who would not question Jack and instead blindly followed his commands. In 1980, GE had 411,000 employees. By the end of 1982, it had fired almost 9% of its workforce, starting with 35,000 employees and followed with 37,000 the next year. Often this meant destroying the economy in small towns across the country. This is a part of the process of the hollowing out of Middle America. A good example would be Ontario, California, which had a steam iron plant that employed 825 people, though it was profitable, Jack closed it and fired them all. Local civic leaders complained, but no one had the ability to do anything. The year before Jack took over GE, net profits had risen by 7%. It was the 10th most profitable business in the Fortune 500. These mass layoffs were not necessary, but every purge was met with a surge in stock prices that benefited shareholders. Newsweek compared his strategy to the work of a neutron bomb. A nightmare WMD built to kill all living creatures in an area but leave infrastructure intact. They gave him the nickname, neutron jack. Cool. Yeah. Yeah. And he, he, you mentioned Jack Donogh, he being based on him also Jimmy Neutron, which I did. Yes, exactly. Amazing. Or it's heartening, I guess, that people from jump or at least there was some coverage that was like, yeah, this is going to ruin everything. Yeah, he's destroying the death of life. Yeah. He is killing life itself. But they were doing it both as like there was an element of criticism, but also like awe. And it's, it's fun because like Jack would always claim to hate this nickname and his autobiography, he writes, from the numbers, you could make the case that there was either a neutron jack or a company with too many positions. I naturally took comfort in the latter, but the neutron tags still got me down. I was fortunate to find remarkable support that got me through at home in the office and in the boardroom. I'd come home obviously a little down from the experience. I bet it's because he thought he was like being called a nerd. Yeah. It made him, it made him so sad to be described as a weapon of mass destruction. And in his autobiography, he credits his first wife, Carolyn, as helping him through the dark, like emotional period that this created. Carolyn and Jack's book is always supportive of him, no matter how tough the press or his job is. She always ended a conversation with Jack, you have to do what you think is right for everyone. Which is how you know every single scene between them is nothing. Like that's just the PR story period. Yeah. There's another way you can know that, which is that he divorces Carolyn in 1987, about five years after this point in his in his story. Their divorce gets two paragraphs of mention in his autobiography. We never spoke, but when we did, it was great. Very not controversial. Then we got divorced for no reason. She was my rock. Then we then I left. The divorce was a forbidden topic by his employees. And there's very little you can actually find about this first divorce of his. One of the very few statements I found about it comes from a guy with the very funny name Dick McLean. We can all appreciate it for a second. If you have a feeling or like if you do the comma reverse, it's McLean Dick. McLean Dick. That name is just like washing my face in a cool stream. Just perfect. Thank you, Dick. Thank you once again. Dick was an environmental consultant from GE's plastic division who worked with Jack. And he told the LA Times quote, you never heard anything about his first divorce. It was in everybody's best interest to make sure that it was all tuned down. His private life was always what was absolutely incredible. McLean said, but he declined to elaborate. Now, McLean was being interviewed for this article in the wake of Jack's second divorce to Jane Welch, the woman that he left Carolyn for, which occurred in 2002 after she found out that he had been cheating on her with the editor of the Harvard Business Review who wrote that praiseworthy article that we quoted earlier. So that's fun. That's ethical is shit. You love to see it. I love all of his friends. All of his co-workers are just like they treat him like an ogre. Like he's just an ogre in the room that no one wants to deal with. They're like, yeah, something's going on over there. But man, I don't know. We only have some fucked up was there, but like you don't want to like get Jack angry. That's just things everybody. The factory life. Yeah. It's crazy, man. So yeah, it's very funny. When like McLean heard about the fact that he was his wife was leaving him because he cheated on her with the Harvard Business Review lady, McLean told the times my instant reaction was oops, checks back to his old ways. So these purges by necessity killed the old GE, all these layoffs. The one in which workers have been able to rely on the company is a lifelong employer and rely on its benefits to take care of them with their old age. Jack called his campaign again to like he called the campaign to like destroy any kind of faith people had in GE is a place where they could like stay. He called this his campaign against loyalty. And it was more than just firing people. He ordered his staff to avoid using the word loyal and press releases. And he ordered his underlings to stoke their workers with constant fear that their might lose their jobs. To emphasize all this, he wrote shit like this in his memos. The psychological contract has to change. My concept of loyalty is not giving time to some corporate entity and in turn being shielded and protected from the outside world. Loyalty is an affinity among people who want to grapple with the outside world and win. What is that? What is I I yeah, I don't like it's I think he's saying that like you know I want the loyalty of like a team of soldiers fighting an enemy. But it's like well part of why soldiers are loyal to each other is they're like protecting each other. And you're saying I want that loyalty but also fuck everyone who works for me. Right. Like it's it's just trying to sounds like it's larger than it is. But we all know what you're doing here. You just need to excuse. And like what are you even trying to say with anti loyalty? Like what if someone right now were to be like I don't think this is a good idea. You would restructure that man. You know like that there would be so much pushback from him. So like what is he he absolutely values loyalty. He's hypocritical to a core. He values loyalty. But he's unsensed by the idea that loyalty might be a two way street. Right. That he would owe loyalty to the world. That's right. Yeah. He's like that's what the money's for. I just need full profit. Why can't I get full profit mommy. And you were like a family yeah. That I have the legal right to abandon you in a snow bank any time. We're like a family in ancient Rome where I as the pattern familiar as have the legal right to execute all of you. Right. Mm-hmm. Jesus. So the ultimate WMD in his campaign against loyalty wasn't a new Tron bomb. It was a management strategy that Jack helped to develop called stack ranking. Obviously pieces of this had existed. Other people you know had come up with kind of some of these ideas. Jack is like the first person to institute them at a major corporation. Every year managers were ordered to divide their workers into three groups based on performance. The bottom 10% of the company was to be laid off every single year. This meant that no matter how well a division or the company did people were always going to get fired. And since managers were required to rank their employees and meant many of those layoffs would be adequate or good employees who simply lost a political game. Stack ranking spread rapidly throughout the country. Jack's peers saw that every wave of layoffs brought the stock price up so they copied him. Today HR software company Corvisio estimates that 30% of Fortune 500 companies stack rank their employees. In November of last year Amazon told managers to stack rank employees before carrying out the largest layoffs in their history. Jack took exceptional pride in how much he was copied. Some people think it's cruel. They're brutal to remove the bottom 10% of our people. It isn't. It's just the opposite. What I think is brutal is false kind and false kindness is keeping people around who aren't going to grow and prosper. There's no cruelty like waiting and telling people latent their careers that they don't belong. Just when their job options are limited and they're putting their children through college or paying off big mortgages, which again, you might have a leg to stand on if you had a policy of we only fire layoff people under a certain age, you know, to make sure that the young ones get out and find something new. But like what if you have a unit, what if you have a unit of 15 people and they're all good and you're like, well, you have to fire some anyway for no reason. Incidentally speaking of ancient Rome, this is where we literally get the decimation. Decimate is like the practice of forcing the unit to kill a tenth of the unit just so that the rest will be stronger. This idea of dates back very, very far. It works. It works for a lot of stuff, you know? Like I cut off every year. I cut off like a tenth of my body. I cut off one toe. This is a total of compensating. Mike, you can learn all about this in my new book, managing like famous Roman dictator, Sulla. Sulla as a general understood that not only do you sometimes have to go through town throwing your enemies off of a cliff and so their bodies are dashed at the bottom and eaten by crows. But you also need to go gradually insane with age, get increasingly conspiratorial and eventually retire to a villa in the hillside where you have unsettling sex with slaves for the last decade of your life. All of these management strategies. Right. The management version of that. The management version of that. Yeah. Which is how I run Cool Zone. It's great. From my villa where I have recently led to a purge that forced the podcast and equivalent of Julius Caesar to flee Italy in order to avoid being murdered for his loyalty to Gaius Marius. You know, that all happened, but the podcast is bad. There you go. Case in point. I don't know. We got off chopic here. So you got off tapping. The reality is that stack ranking often has disastrous outcomes for businesses. One 2013 study in the Journal of Business Ethics found that ratings-based performance reviews, like the ones Jack instituted, quote, often failed to change how people work. And the satisfaction with the appraisal process has been associated with general job dissatisfaction. Lower organization commitment and increased intentions to quit. Stack ranking is also generally recognized to be incredibly toxic to morale, which has led some of the companies that follow Jack to in the process or the practice as this quote from Fast Company makes clear. After years of requiring managers to stack rank employees, Microsoft workers cited the practice as the most destructive process at the company. It leads to employees focusing on competing with each other, rather than competing with other companies. One employee told Vanity Fair in 2012, Microsoft asked the organization stack ranking system in 2013. The article also quotes John Fries, a senior managing director at Encura Consulting, who said straight up, Jack Welch was wrong. This is a guy we thought was incredible as a leader, but really he led based on fear. Now, the fact that Jack was bad at his, like, the thing that was his primary claim to fame, that it like actually doesn't work very well and was in fact disastrous for a number of businesses never stops people from following him. That's what happens with these guys. It doesn't matter. No one collates the information to see if their idea worked. And crazy. What's happening now? A lot of tech companies are adopting it under the understanding that like, well, it didn't work great in Jack's day because like you were kind of relying on managers and their subjective opinions about who was performing well and not. But now with all these computers and algorithms, we can narrow those shoes, the best workers. And then we can, yeah, it's still bullshit. But it doesn't matter because these people are too wealthy and powerful to ever face consequences, which is why we need a thing that rhymes with schmarrgated schmashmashination. But you know what else rhymes with that? Yeah. Products and services. That's right. We're back. I for one loved those ads for untraceable poisons. I started in a pan for bacon. Is that what you were trying to say on the other side of the brain? That's right. I've been trying to figure it out. That's what that's what will save us, Michael. That's what will save us. Nothing illegal, just that. Anyway, all the money that Jackie Boyerne's, you know he paid two people to fight to the death in front of him. Okay. But look, I guess we're going to deal with this now. We're going to fight out. This has been an argument you and I have been having for years. Yes. And I think it's very petty of you to bring it up here. Like some people pay others to fight to the death for them. Okay. That doesn't mean you're a bad person. You know, sometimes it just happens. You did. Well, yeah. But who amongst us hasn't, right? Who amongst us hasn't been? Yeah. You know, I think it's telling that you're getting defensive when Abe was really just neutrally stating it. That's what that's what I'm seeing here. Well, look, there's a lot of little mountain towns in rural California where there's not much work and people will do almost anything for $75 and a bottle of oxycodone. And I don't feel like it's fair to judge me for seeing if they could kill each other with sling blades like in that movie sling blade. And by the way, they can. You remember that movie sling blade? I do remember sling blade. And to mention another movie, Jurassic Park, you were all caught up thinking about how to do it that you didn't think about whether or not you should do it. And that's the point here. I mean, don't do it, Robert. Again, I just feel unfairly judged. But Jack was not judged negatively for for stack ranking people. And in fact, the entire industry fell in love with the idea of firing 10% of their companies for no real reason. But the fact that it made the stock market look good and it made the stock market happy for no real reason because it didn't actually increase profits. It just meant that temporarily companies had more money to put into things like we'll talk about stock buybacks to give out indivitance. And that made shareholders happy. It didn't make the company stronger. And in fact, over time, it made them much, much weaker. But that was for future people to deal with, not for fucking Jack Welch. So yeah, in his autobiography, again, Jack tries to dress this up as him doing a kindness to his workers because if he shit cans them when they're in the prime of life, being laid off as he says just another transition, you know, he even describes it as like a charity that he's doing. I'm freeing them from a job they're bad at so then go succeed somewhere else, right? It's a social good. Now, the reality is that being laid off, which is, you know, some firing someone not because they fucked up, but because the company wanted to boost shareholder value is one of the most stressful and traumatic things that Americans regularly endure. One study found that it is the seventh most stressful life experience above divorce or the death of a close friend. And that on average, it takes two years to recover from. Now, that may seem a little crazy, especially the more stressful than the death of a friend part. But there is a, yeah, well, if Abe died and I got fired, I'd be like, I need a job, dude. Yeah, yeah. You wouldn't be, you wouldn't be just searching straight away for another Abe. You got to make rent. Yeah. Right. And then I could save that grief for later. Not that there's no grief, but that will come. I need a job. Yeah. I need a job. I have to be able to, to, to fucking, you know, pay for my rent and various, various gummy bears and jujubies that I can zoom. So there is also just objectively a serious health cost to being laid off. For healthy people, with no pre-existing medical conditions, if they are laid off, the odds that they will develop a new health condition raised by 83% in the year and a half after getting laid off. The risk, yeah, it's significant. The risk of suicide increases by 1.3 to three times. Jack Welch laid off more than 105,000 employees in his first five years as GE CEO. In the US at that time, the suicide rate was around 13 per 100,000 people aged 15 to 24. This means in crude terms, just in terms of suicide, we're looking at like 30 or 40 deaths somewhere in that neighborhood. I love the show. Imagine that your life, you're like, I, me as a person, I made the suicide rate in the country. Go up. I did that. Hey, hey, number go up. Hey, if the planet's a business, then that's just boosting Earth's stock, you know, you know, I think probably dozens of deaths of suicides that we can associate to Jack's layoffs, which you have to also like hundreds of thousands, eventually millions of people are laid off because of these strategies over the course of decades because of the strategies that he helps to pioneer. So again, that's quite a few deaths you can lay at this guy's feet. You can also blame him directly for some of the worst moments of my childhood and some of the worst moments. I'm going to guess for the in the childhoods and adult lives of a lot of the people listening to this show, who remember like a parent getting laid off as part of a yearly fucking layoff binge like this and like coming home to their parents like weeping and not sure how to like fucking pay for basic necessities and stressed out for months on end. You know, the shock waves that this guy's decision makes in the lives of tens of millions of people are kind of impossible to like adequately. Want to find. Yeah. Yeah. Anyway, I don't know. Again, untraceable poisons go to Use promo code Jack Welch. And I don't know, find someone talking about the fucking the stock market and put it in their drink. That's that's the behind the bastards. It's really should be. It's our advice. Yeah. It's dot ADU. Untraceable Poisoned. And study to you. Yeah. So it's interesting to me that Jack wasn't content just being a cruel Mr. Burns style corporate psychopath. He repeatedly pushed the line that he was doing because Mr. Burns, which is like you fire workers because fuck them, right? Because you're because it's fun. And it was like your heart is cold. You're like, no, I know. I don't care. Yeah. Jack was like, no, I'm doing a kindness to them. This is what's best for them. It's best for all of society, really. His speech writer, the guy who was like his speech writer at GE later explained in an interview, quote, Jack loved the approval of Wall Street, but the Irish and him crave the approval and affection of the divested employees as well. He wanted to believe they were thrilled at being divested. Oh boy. Again, but I know people love wearing vests. Yeah, obviously, just the real waistcoat culture. No, I love to put like what a weird dated way to like the Irish and him. You know what I mean? The poor people inside of him. I know, I know he's just a bastard. And I don't have that much sympathy for the devil, but I can't, everything you tell me doesn't make me more angry because I know that all this stuff exists. It makes me sad. I'm sad for Jack. Like because he so much of him is like it's so important to him that he's liked and that he, like everyone thinks he's a cool guy. Yeah, it's just so sad. Kind of what it leads to is his colleagues, the other people in like higher up positions that GE engineering a situation by which he thinks that he's liked by employees because obviously he is not. People will talk about like it used to be fun to work here. I used to feel good about coming into work. I hate it now. I'm miserable all the time. You've turned this place into a hell. I'm leaving to join the crew of the Ellen DeGeneres show. Yeah, yeah, exactly. So I can finally get some respect. Yeah, so I also think, you know, it's possible that this speech writer is himself kind of misled in Jack maybe did not care nearly as much as this guy thinks about what employees felt about him because Jack also had a reputation for using kind of the language of warfare and violence to describe layoffs. He was known to when he would do like his tours of different business units and stuff. He would mark workers out for firing by saying they should be shot, shoot them, or they ought to be shot. All of which meant lay that person off right now, which is like, that's like psychoshit. Yeah, it's Dr. Strangelms. Yeah, like Pat and my favorite guy in the world is Pat yeah, exactly. And then the fucking goal, the move that I always hate the most is, why don't people like me? Fuck you, dude. That's no, absolutely. But it's so sad when it's like when you just hear about, because now I'll, you know, Robert did this because he made us think about the boy first. Yeah, you know, I don't have what you're having. I have no okay. It's very cool. Yeah, I will say in terms of Pat and Pat and had one experience that I think would have improved Jack Welch. He was shot several times by a machine gun. And really, I think that that, that, you know, we could have tried it out as all I'm saying, you know, might have helped. If you're going to lead with fear, maybe have a little in your own life, at least a little. You should have seen the machine gun. So since you can't lay tens of thousands of workers off without causing problems, Jack also embraced another strategy that was about to become vogue in corporate America, outsourcing. He was famous for saying shit like, don't own a cafeteria, let a food company do it. Don't run a print shop, let a printing company do it. What this means is that he fired janitors and security guards and food service workers. And then he brought in low-paid temps who were in contracts with outside companies to do the same thing that had previously been done by people who had a decent standard of living and a pension, right? That was the whole point is like, well, why would we? And what one of the things this does is it creates at the for the first time at these big companies like GE, there's different tiers of worker before GE, you know, your best engineers and the people at the cafeteria are all GE employees, right? They all, you know, they get different compensation obviously, but they're all on the company health plan, they all have a pension, they all have life insurance. Now you've got this second class of human being in all of these GE facilities who are basically on the verge of collapse at all times because they're not being taken care of by their employer and the United States has no social welfare system. And of course, again, you can't, one of the things I'm probably not getting into enough here, you can't separate anything that Jack is doing from the fact that this is the Reagan era, right? A lot of like what he's able to do is because of rules about how corporations are allowed to behave, get loosened. And we'll talk more about that in a little bit by the Reagan administration. And so all of these workers who are being let go and all of these temps who are being brought in are benefiting from less social welfare programs than people had previously because, you know, the Reagan administration is cutting that at the same time that Jack is cutting these people out of general electrics, you know, corporate welfare system. So another thing that Jack pioneered was offshore. And a mentioned Homer's. Yes. Oh, I was just going to say I mentioned Homer Simpson. And it is striking me now. How it's just the dumbest possible way to go about like it's not even like he's pretending to play 40 chess. It is not a sophisticated thought. No, it's very much like when Homer is a garbage man and his motto is can't someone else do it. And you just say that like it's brilliant and it's really not. Yeah. Yeah. Fuck certain people. Just have confidence if apparently is his superpower and be angry a lot. Yeah, I mean, that is like the only real superpower. You know, like people who are into like the occult and and and and magic and stuff, like talk about the fact that like real like like like what magic actually is is kind of like the the utilization of like will in order to change the world, right? And I think the clearest example of that is not like, you know, wizard guys like Alan Moore. It's guys like Jack Welch. This is a this is a powerful dark wizard, right? He's using pure will power, pure self confidence to remake the world in his own image to do a thing you shouldn't be able to do to destroy a company's ability to profit to destroy all of its business to destroy. It's it like the creation of things that previously like made it great and replace that purely with this illusion that is somehow more profitable than the thing that actually produced items of value. That's magic. It's like a virus until every other company also operates that way. It's quite something. This is and by the way, when we talk like in terms of like fantasy authors who understood this about magic, this is exactly how token conceived of it more or less, right? Like that's this is Saramon, you know, like that's a rough fucking happening here. Yeah. Anyway, cool shit. So Jack pioneered offshoreing the process of moving production facilities and jobs to companies with looser labor laws and lower minimum wages. During speeches and interviews, he often said variations of this line. Ideally, you'd have every plant you own on a barge to move with currencies and changes in the economy. And he's going to like move GE to have its corporate headquarters. I think it's the fucking Bahamas or something like he's one of the first guys you does that too. Like again, like there was this attitude in the previous era by a lot, not all, but a lot of like executives that paying taxes to like support the country functioning was one of your jobs as like a business, you know, leader. And Jack is like, no, no, no, we have to hollow this country out. And part of what that means is like making sure we have no responsibility to the United States whatsoever. He helps lobby the Reagan administration for like a change in business law that basically means like you can kind of by shifting like technically where products are being like moved through. You can pay taxes in different companies. There's it's it's I don't need to get into the specifics of it. But like one of the things it does is that suddenly a huge amount of GE's biggest transactions are technically legally occurring in Ireland, which has a very, very low tax rate for that sort of thing. It's it's cool shit. So Jack was not able obviously to literally put all of his plants on barges to move them around the ocean. But by moving jobs out of the country or just parts of the country without as many unionized workers, he was able to break the back of the unionized workforce that had helped make GE a powerhouse. Jack was also one of the first CEOs to outsource to India. And as the GE stock price continued to outpace the market, more and more of his colleagues followed him. One of the few aspects of GE that Jack had any actual love for was the previously minor finance division. We talked about this a bit in part one, but this is what actually made it all work. I'm sure the question that a lot of people have right now is like, well, but you say the company kept making more money. So was he maybe just actually doing a good thing that you didn't like? And my argument would be no, because the reason that GE's balance sheet looked good, that it looked like profits were increasing and that the stock price kept increasing is that Jack understood how to use this finance division as basically like to create a fog of war around the internal company functioning that looked really good to people on the outside because he was able to kind of manipulate the balance sheet, right? So what he was doing is using this finance division to buy up new businesses rather than like R&D and develop anything of its own that looked like they would be profitable. And at the same time, he would sell off businesses GE had many of which were still profitable because it would bring in the swift short term profits. And by kind of mixing these sales of business units with purchasing business units, he was able to ensure that the balance sheet kind of said whatever he wanted it to say. So he could say at the end of Q1, these are where our numbers will be. And then he would just buy and sell companies until the numbers matched that. And so to the people on Wall Street, it looks like, oh, you know, GE's like hit its numbers again. That's great. But what's really happening is he's just kind of like shuffling shit around in order to make it look like he still has a business that's producing something. A good example of this would be in 1985 GE purchases RCA, which Jack justified to Congress because they have to have like an anti-trust hearing over this by saying it would let an American manufacturer compete efficiently with a Japanese manufacturer. But he didn't do this. Instead of trading the entire instead, he traded. So he like buys this being like, this will be, this is worth, you know, it being kind of bad for competition because it will decrease prices and provide a better product for Americans to buy that they'll buy instead of Japanese products, right? But instead of actually making like shit with the the TV division that like he had bought, he sells the TV manufacturing division to a French company and change for a medical device business. One of the only things he actually keeps from the RC sale is NBC. Author Barry Lynn writes, in two strokes, Welch remade multiple world spanning industries. The ration albohydus moves with simple concentrate power of void direct competition with firms backed by mercantilist states as Japan's electronics companies were and focus on industrial activities that could be protected through interaction with regulators. The medical device business or the pentagon's because RCA has a defense business that he also keeps. So he's not, he's not competing. He's not interested in providing a product. What he's interested in doing is kind of like using GE's financial power and the fact that they can get loaned money to buy and sell pieces of the company in order to optimize how it looks on paper, right? The interesting thing to me about this is that the division that Jack traded to get like this medical device division doesn't make a profit. In fact, it's a disaster after he acquires this business. It's profits collapse and the division like goes bankrupt effectively enough. But this doesn't actually hurt GE or Welch's reputation. Like it seems like a disaster. We bought this company, we traded away its best assets for this medical device business and then that business fails. That seems like something that should get you in trouble. But the stock price still went up as David Gels writes, what mattered and what Welch had achieved with the RCA deal was making GE bigger. GE's television set business was now the one of the largest in the world, fulfilling the mandate Welch laid out at the Pierre Hotel in 1981 that every group should be number one or number two in its category. So when all of these tactics, mass layoffs, outsourcing, offshoring, high speed trading of corporate assets, Welch set precedence that his CEO peers couldn't wait to copy. And I'm going to quote now from an article by Matt Staller. For the 2000s, the company founded by Thomas Edison didn't even manufacture light bulbs, sourcing them from Chinese contractors and branding them as GE products. Other leading companies such as General Motors followed Welch's path. In the mid 1980s, GM bought both electronic data systems and Hughes aircraft, attempting to diversify away from the auto industry in which it was set up against foreign competitors backed by governments into regulated industries with government contracts. What it couldn't do by diversifying, it did by offshoring, moving production to low wage areas like northern Mexico starting in the early 1980s. The steel industry did the same thing. US steel bought not only marathon oil for 6.3 billion but paid 3.6 billion for Texas gas and oil. National steel bought United Financial Corporation of California and another steel company, Armco, went and do insurance. Meanwhile, in 1986, the Reagan administration's Commerce Department invited 38,000 American companies to retrain fair in Acapulco, encouraging them to explore moving factories to Mexico. So again, Jack is not the only guy doing this. He's not the inventor of this concept, but he proves that it's incredibly profitable. He basically shows these companies you can build and maintain a business that makes things or you can be in the business. You can basically turn your company into a balanced sheet from a finance company where you're buying and selling assets. And you're not in any particular business as much as you're in the business of shuffling around these assets. And that way it's really easy to do something like, oh, we made an extra billion dollars this year. So let's sell off this business that's not doing as well and claim that as a loss. And then we can offset our tax burden. All this fuckery you hadn't been able to do before, Jack realizes that kind of by turning your corporation into a big unlicensed bank, that's a much smarter idea than actually producing anything of value. mention magic and dark wizards. I would say it's honestly he's less like Saruman because his magic actually does change the world. And he's more like a stage magician or a David Blaine, where he's just like it's slight of hand, right? He's drawn attention away from thoughts like, what does this business do or make? Is it useful? And drawn it to, you don't have to worry about that. The number was 40 now. It's 41. Exactly. Yeah. Yeah. It's something else. By the mid 1980s, Jack Welch was the most celebrated CEO in the country. And a lot of ways, he's one of like the very first celebrity CEOs of the modern era. He's the subject of faunting profiles and business magazines for his brilliant leadership and his unprecedented stock market success. And he'd also, and he was happy and he could stop. Yeah. Michael never cried. He's about to get a little sad because right about this time in 1984, Fortune Magazine declares him the toughest boss in America. And they don't mean this as a compliment. They write Welch conducts meetings so aggressively that people tremble. He attacks almost physically with his intellect, criticizing, demeaning, ridiculing, humiliating. In the man who wrote capitalism, David Gell's goes even further, quote, Welch was in short a bully. You fucking guys don't know what the fuck you're doing. He fumed at executives in the plastics division when they missed their numbers. It was what the Wall Street Journal described as Welch's hazing and shouting match approach that requires managers to argue strenuously, even if they agreed with him, said one manager whom Welch replaced, you can't even say hello to Jack without it being confrontational. If you don't want to step up to Jack Toto, Billy de Belli and argue your point, he doesn't have any use for you. In his autobiography, Welch calls this fortune article that describes him as a bully. One of the worst moments of his career. He's like, it's, but it like again, I think he's just full of shit because he knows he should say that because this has no impact on his behavior. He's so, he's so less. He's just a husk. He maintains a chip on his shoulder regarding journalists for the rest of his life. He had initially been thrilled to acquire NBC and specifically he says he was excited because it meant he'd get to write paychecks for guys like David Letterman who were famous. But then he, yeah, it's very, very that child. Yeah, yeah, yeah, silly. But Jack also, he gets very frustrated because he realizes like owning a news company doesn't mean you can force the news division to report on things the way you want. So in 1987, we have this thing called Black Monday, which is like one of our, our mini great market collapses. And Tom Brokaw gives a report on the nightly news about how bad the damage was going to be. Right? Where he's talking about like, this is not just one bad day. Like this is going to continue echoing. This is a serious problem. Welch calls the head of NBC's news division and complaints. You're killing all the stocks. Yeah. What do you, do you think that he ever like had stopped and he was like, maybe I will maybe Robo cop the villain is based on maybe maybe Paul Verhoeven read a profile of me and immediately made Robo cop him on all of America's satire's focus. Like he's just the all villain. He's all political cartoons are about me like, yeah, yeah. It's something else. It's very funny too because the head of NBC's news division when he's like, you're killing the stocks, you have to stop him. It's like it just says, this is not a thing I am willing to talk about with you and ends the call. You'll never get to me, comp us. Yeah. So this is not going to be the last time that Welch has a competitor or a fight with his journalists. And it's not going to go as well the next time. But we'll get to that in a little bit. In 1993, Jack goes through one of his regular mass layoffs and reappointments of talent and producers at NBC. He picks a new manager for CNBC, his business news channel. You want to guess what this guy's name was? Come on. Come on. Come on. No, no, no. Medirty Dicks. No. Slurpy McQueen. I'll give you a hint. He's a sex pest. I'll give you another hint. He helped break the United States. Break it. It's Roger Ailes. I was like, you have to be more specific. This is the guy who starts Roger Ailes's career. Isn't it wild that sex pest narrows almost nothing down at all? Wow, that just that just brought it down to a couple hundred guys. Yeah. Wow. He hires Roger Ailes to run CNBC. One of the first things Roger does is he creates a new network of his own called America's Talking, dedicated to full-time political news, which was kind of a wild concept in the era. And it's something that he would follow up with a little bit later because he's not at NBC, NBC very long. Ailes gets fired three years in due to all of the sex crime stuff. But Welch bears him no ill will for this. He alters Roger's non-compete clause so that Ailes could immediately take a job from another asshole, Rupert Murdoch, which turned into Fox News. We have Jack, partially thank for Fox's neck, cool. And then Nate. Right, well, way back three minutes ago when you said, it turns out you can't force the news to say what you want. I'm like, yeah, can't you? Yeah, eventually can't you, you can get in there. Does he go to like conventions where like you choose like evil conventions where you go and you just like walk down line is like, oh, that's a new type of evil. Maybe you should buy that. Let's get a little that in the mix. God, so he fucked up media as well. He sure did. He's he's quite prolific in his fuckery. Wow. Good way to go, Jackie Boy. But he gave us the Jack Donoggy character. He did almost a break even. Yeah, good character. Little yeah, 50 50. So since GE's profits continued to rise alongside their stock price, Jack gained an almost divine reputation as a corporate mastermind. The truth was that he made many very expensive mistakes. A good example of this would be the purchase of Kitter P body, an investment bank that he thought would give him first crack at new acquisition deals without needing to pay fees to brokerage houses. But again, Kitter was in worse shape than it seemed. He hadn't done his due diligence properly. And right after it gets acquired, one of its best traders gets caught carrying out one of the largest cases of insider criminal insider trading in the history of the United States. So this is a problem. The political fallout to this forces him to bring in a new head for the business. And he picked a GE board member whose prior experience was running a tool company. When the market crashed the next year, Kitter imploded. And for a time, they're even kind of staring at potentially a massive fine for all of these crimes that their trader had committed while working for them. But thankfully, one of Welch's men was able to negotiate a sweetheart deal with the prosecutor in this case. And you want to guess what that guy's name was? I'll give you a hint. He was real close when 9-11 went down and now his head melt sometimes. Giuliani. Yep. Yeah, it was Rudy. Yeah. The melting head. Now, melting head. That's a detail I can work out. Yeah. Yeah. Yeah. Yeah. Rudy Giuliani. We're getting all the all the greats are coming in. He also helps Trump by Trump tower. Yeah, of course. Because they're friends. This is like a marvelous movie where you're like, that's where he got the hammer. And that's where he got that you're like, then he meets him and him and you're like, okay, I see how this is going to go. So Jack's real genius was an understanding how to run GE like an asset portfolio in order to game the market. Again, as I said, he would buy companies or sell them and even hand over assets to charity sometimes in order to make sure that GE's like earnings met the targets he was setting because that's something that always makes the stock people very, very happy. This allowed him to disguise the strength of his actual business, which he was steadily hollowing out by camouflage in it with acquisitions. As former GE marketing executive Beth Comstock said, GE had a financial army that was able to close the quarter the way we'd said we would. Now, this some times meant destroying thousands of human lives. For example, in 1997, GE made a huge deal with Lockheed Martin, which earned them $1.5 billion in profit and another $600 million in tax breaks. That's great, right? That seems like good news, right? But all of that money going into the quarter it was going into was going to mean GE was going to have to pay more taxes. And that's just not something that Jack Welch was willing to accept. So some of their factories were underperforming. So they closed a bunch of factories, which gave them a $2.3 billion loss on paper. Even though the factories had been like paying for themselves, he was able to take a $2.3 billion loss by closing them, which allowed him to offset the profits. A thousand people lost their jobs, but the stock went up, right? This is when I talk about how he would fuck around with acquisitions and sales to disguise what was going on at the business. Like this is the kind of shit that he would do. And he was very good at this. Now all of this, yeah, it's pretty good, right? It's impressive. It's impressive that because you have to think about also the margins, like this is GE. They're talking about American steel and plastics and oil. It's like he had too much power. He had too much power. And you know who else has too much power? Ads? That's right. The ads that we put on this show are all hand-picked because they were designed by a team of evil psychiatrists in order to hack your brains and force you to purchase products and occasionally, occasionally murder your families. So by these products. The power of capitalism compels you. Ah, we're back. I hope this time nobody was was was convinced by the ads to I'm saddled with products now. I'm just good. I'm just good. I'm glad it's good. Yeah. I'm glad you made down by products and services. Absolutely. I couldn't help it. All of them all the services are in me. Glorious. That's exactly that's exactly what Jack Welch would have wanted. What an inimitable thing to say. Thank you. So all of this kind of, you know, Jack Welch shit came with a serious cost. One of them is that GE stopped doing in-house R&D. Again, this is the company that invented like all of the plastics we use and like light bulbs down the thinking division. Yeah, the brain division does not make short-term profits, right? You put money into the brain division to make all of the money in the future, but Jack has no interest in that. He's like thinking of the light bulb is not profitable. Where's the profit in thinking about light bulbs? Find a guy who already thought of a light bulb by his company and then sell it six months later to offset the profits from another. Yeah, like, it's just it's just fucking nonsense, but it's very profitable nonsense for reasons that are themselves nonsensical. GE had basically become a venture capital company, right? That's what he turns GE into and that's what it will remain be for the remainder of Jackson year as CEO. Perhaps the most inflow is changed. An infamous change that he instituted was stock buybacks. This is when a public company buys shares in itself from other investors at a marked up rate. Theoretically, because they feel their stock is undervalued. Since this increases earnings per share, which Wall Street analysts use to measure success, it also boosts the stock price, letting companies manipulate their own stock. Now, this was made not in close to illegal, like it's not technically illegal, but it's like very hard to do in a way that's legal, so it doesn't really happen after 1933. And the reason why it gets restricted heavily after 1933 is that this kind of shit is part of what caused the Great Depression. Well, the reason is obvious. That's like him saying it's very clear why this is a bad idea. Can I just change the number? Can I just change it to whatever at any time? I guess so. Yeah, cool. In 1982, the Reagan administrations SEC signed off on a law that made buybacks a lot easier. And again, we're not going into this as much as perhaps I should, but for every fucked up thing that Jack does, there's a change in regulations that's heralded and pushed through by the Reagan administration. You cannot separate the two from why things have warning labels. Basically, yeah, Reagan had to sign each one of these terrible ideas. Yeah, yeah. He was the the Gipper couldn't get enough. He was he was signing shit and then like sparing off into the distance. And like, what I don't remember what numbers are really, but I can remember. Sit it. Yeah, like he's he's like fucking zoning out thinking of bedtime for Bonzo is like Nancy feeds him fucking gummy bears so that he can sign a piece of paper to force everyone out of the mental institutions. It's it's it's good stuff. Now, how does this suppress the gaze? I mean, some of the people we lay off for gay great, great, great, great. Great. Thanks Nancy. Fucking drooling as his brain melts out of his ears. Well, Jack, well, it's dance is a little caper to get him to deregulate the fucking dumping into rivers. Like it's it's awesome. It's so good. In 1988. So yeah, 1982, the Reagan administration is like buybacks or thing we're fine with now. And Jack Welch responds by what was then the largest stock buyback in US history. $10 billion. $10 billion that in a previous era would have gone like straight to GE employees, right? Instead all goes to just pumping up the company's stock value. Now, the rush to follow Jack because everybody follows in his wake is not something that Jack causes alone. Again, he's not the cause of this as much as he is kind of the most he's like a poster boy for it, right? He like the fact that this works so well for him helps build buzz around this helps make this a more common idea. You know, the Reagan administration and this like network of right wing economic think tanks are the ones who kind of push the change itself. But he's helped set the trend by the end of the 1980s corporation spent 30% of their products on buy of their profits on buybacks by the end of the 1990s that number was 50% and it's gotten a bit higher since this is money that did not go to investing in R&D or paying employees more or doing anything else of actual value. David Gell's rights had so much of the wealth created by corporations not been reverse distributed back to investors in the form of buybacks and dividends over the past 45 years and had pay kept pace with productivity. The average full time American worker would be making about $102,000 annually roughly double what he or she is today. That's cool. Yeah. And people people who are idiots and liars when you bring this up will say, well, you're not being fair because you know, when you with the by doing these buybacks, it's good for stock and a lot of it, you know, employees compensation their 401k's are in stock. And if anyone makes that like claim to you as for why this was not bad, it's legal for you to stab them in the face because one of the things that Jack has done by firing as many people as possible and like outsourcing their jobs is he has made sure that a lot fewer employees are getting 401k's and a lot fewer employees are getting stock, which has been a pattern that the entire rest of the corporate world had fault has followed. It is much less common for regular employees to be rewarded with stock now than it was in the age that Jack helped to kill, right? Like this only benefits a tiny number of people. And it's again, if people bring this up in an argument, you are allowed to give them strict nine. That is that is a law also passed by the Reagan administration. So, you know, the Gimper did need it bad, right? Yeah, you give it and you take it away, you know? And look, if you can't get the strict nine, you get the knife, you knife someone who has strict nine now, you exactly, exactly. Hold your hand through every step of the process. Trickle down, weapon, yeah, trickle down, weaponomics. Yeah, all you need is either strict nine or a knife. You can use the strict nine to get a knife, use the knife to get strict nine, you know, it's either way. It works perfectly. Perfect. Yeah. So by 1993, GE was the world's most valuable company, worth $100 billion on the stock market. It would increase to 600 billion by shortly after the time Jack leaves as CEO, which sounds again, like he's a great CEO. This is stock market value, right? This doesn't mean the company is selling or buying stuff that's worth that much. It means that's what the stock market thinks that it's worth. Think about how Elon Musk went up and down by like a trillion or a billion dollars or whatever, billions of dollars. And the course of like three days because of shit on Twitter, that's not real money. His actual value didn't change in any meaningful way over that period of time. If you believe in you today, it's so stupid. Yeah. It's bullshit. It's like, yeah, it's, you know what it is, is like when you would play games as kids and like one kid would be like, no, I have everything proof armors. Your bullets can't hurt me. That's what the capital holding class have done with all the stock market bullshit. And the again, the way you would handle that shit on the playground when I was in second grade is you would get a handful of pebbles and you would throw it at the kid who's being annoying. And his armor is gone until a summer is gone. Oh, you don't have armor. You got armor on. Let me show you how these pebbles do against your armor. That's right. You do that child. Yeah. And I think if we had, if more people had hucked fistfuls of pebbles at Jack Welch, we would be a better country right now. I don't know that it would have stopped him, but at least he would have had to get pebbles out of his eyes and like out of his ears because like one gets in his ear and then he tries to like get it out, but he just pushes it deeper in and they have to go to the nurse. And then you like have to hide because you don't want anyone to realize that you got a pebble in that kid's ear. I don't think it would have actually helped them because as a kid, you probably would have just doubled down on the world scary because what like what this all is to me is you just told us what like the origin story of Darth Vader, like this just Anakin Skywalker right now, like just build your mind. The younglings be forever and a lot of plastic to fish through pebbles at his head. Exactly. Look, you know what, if fucking Obi-Wan had the courage to just pebble him in the face, he would have won that duel a lot faster. Fuck you. Some rocks at his head. Fistful of pebbles will solve most problems, a man can encounter this forces with you. Yeah. So you don't want to fight me? No, so yeah, the GE that Jack built was profitable to shareholders and only to shareholders and only for a while. More than anything, GE's value was the product of a reality distortion field that Jack was able to create because Jack was good at PR. And because since everything he was doing was so new and novel, he gets all of this like insane media attention where like people are just like, wow, Jack, he's the best CEO in the world. He's like, you know, this absolute visionary. And it leads people to just like kind of assume like anytime he makes any change after this hype cycle started. Yeah. So the value of the stock goes up. I'm going to hold up one of my factories actually. Yeah. It's this really smart. Yeah. The term reality distortion field was coined to describe the way Steve Jobs was able to like manipulate people. Build his own legend. Yeah. Jobs is good at that. Jack's doing that too, right? It's not a thing. Steve Jobs is not the first guy to figure this out. That's why people think GE is worth $600 billion is because it's not because they believe in GE because the actual business of GE gets weaker and weaker and weaker throughout the 1990s, they believe in Jack. Yeah. Yep. Yeah. House cards. House and cards. Interesting that every single one is individually thinking about their own. Like if the number goes up, I will have safety and security in my life. Mm hmm. Just weird. It's good stuff. Tricky to me. Yeah. In 1995, Jack suffered a heart attack. It hit while he was at home brushing his teeth. His wife had to rush him to the hospital. He took it like a baby as they like wheel him into the ER. He's screaming. I'm dying. I'm dying. Like a little fucking was. The problem was severe though. He had to get a quintuple bypass and when his first attempt at surgery failed, you know, he's very scared. He thinks he might not make it. So he reaches out to a close friend who happened to have recently gone through a multiple bypass surgery himself. You want to guess what close friend he reaches out to for comfort in this period? I don't know. An actual monster. It's Henry Kissinger. Yeah. It isn't actual monster. It's it's Kissinger. His good friend Henry Kissinger. Hey, I'm dying. I was never alive to begin with. He's like someone. I don't know why someone laid off all the surgeons at this hospital. I don't know. I can't get my thing. What what he does with this surgery does much more funny, much funnier. So whatever comfort Kissinger gave him, it did not spur any kind of spiritual change in Welch. In a 2001 interview with PBS, a host brought up his quintuple bypass. The host's name is Varnie. I forget what his first name is, but who gives a shit? It's it's PBS. Was that a real change in life for you? A change perhaps in your spiritual approach? Welch. No. So. That's just no. Yeah. And the guy at the Stewart Varnie's, his name keeps asking, being like, come on, it has to have done something, right? Like you have to have had some sort of change over nearly dying. And finally, Welch was like, you know what I thought Stewart? Larry Bocity. My friend and allied signal asked me. He said, Jack, what were you thinking of just before they cut you? I said, dammit, I didn't spend enough money. Yeah. Right. Yeah. He's like, I was so cheap about everything. I didn't buy nice wine and stuff. Yeah. So I'll never buy wine that's less than a hundred dollars a bottle again. That's like the promise he makes. He wants his last check to bounce is what he's saying there, right? Yeah. He wants, he's a grifter. Yeah. And the last thing he thought was and they all love me. That's the problem is he'll never get his come up and said never did even in his own mind. I'm sure in his mind, he was like, I crushed it. I'm a hero. Yeah. A life full of lives. As our most assholes, right? Like this is a pretty common. Yeah. The distortion field works on you too. That's the problem with it. Yeah. That's why we as the future need to look back on history and laugh at it and say what you should be punished. Yeah. We have to laugh at the history as we poison the future, right? That's the only way for us to make a better world. Again, You know, children are the future. Children look out. It's a war. So I think my favorite anecdote, this is from a New Yorker article that is quite good on Jack Welch that is to its credit after he dies, he gets like a lot. He gets a number of like praiseworthy articles of, you know, obituaries about him. The New York article is like, what if he was a piece of shit? He sucked it. Everything. It's a pretty cool article. And I'm going to read a quote from it that's talking about his relationship with his heart surgeon. A few months after he recovered from his bypass surgery, Welch went to see his heart surgeon, Kerry Aikens. They had become friends. He was incredibly cordial for someone who was that powerful. Aikens tells the guy who wrote the book that this anecdote comes from. Welch had wanted the operation to be done on a Friday so that he would have three days of recovery under his belt before the news hit the stock market. And Aikens obliged. Now Welch wanted to talk. You're doing great. Aikens told him, well, go ahead and ask your question. Jack said, what Aikens replied, go ahead and ask your question. He said again, what do you mean? Aikens responded, genuinely confused. Well, I presume you're going to want me to give you some money. Jack said, you didn't pay your bill. Aikens replied, come on now, Jack said, you must have thought about this. Do you want me to donate something? Jack, it never crossed my mind. Aikens replied. So, so what's happened here is Jack is like, all right, you did the surgery. You must want me to give you, you must want me to set up a foundation that you can lead or like give a bunch of money in your name to a charity. How much do you want to give it? Yeah. That everyone's a leech and he deserves the money and he's a good guy and everyone's out there. And he's like, well, you saved my life so I won't fight you on it. But like, you know, what do you want? And Aikens is like, I'm a heart searcher. Like this is what I did. I did my job. And then you're like, oh, your heart searcher, do you think you're better than me? Yeah. Yeah. And he's like, he has no, and you know, Welch does like Aikens, like does the thing you should do in that where it's like, I don't know, like give a shitload of money to this, this, you know, thing that is good. And Welch, by the way, doesn't use his own money. He has GE make the donation from its charitable foundation. So it'll offset their taxes. Yeah. But it is like, it is, he is such a piece of shit. Like that's so telling. It's incredible. The pettiness, the absolute spite you have for your fellow man. Yeah. Like, there's just so much going on. That is just like it. Yeah. Chef's kiss, you know, he just complimented the chef. I didn't do this for much. I mean, like heart searchers tend to be pretty well copied. I didn't do this because you would give me a donation. I did this because it's my job to do heart searchery on people. Yeah. I do things. Yeah. Like I actually have a job that I haven't think of value. Like there's a very clear objective value to what I do in society. It's around like a show. I'm not just like sticking a bladder where your heart used to be in the hopes that you won't notice. No, he's still got all sorts of organs. I actually fixed your cold dead heart. What a piece of shit. What an asshole. One of the last big decisions, Jack got to make a GE came during the chaos that followed the 2000 election. Well, the rest of the country was trying to figure out who would want in Florida and NBC journalists were scrambling to report responsibly and a chaotic and confusing time in American democratic history. Jack sat in the NBC decision room, calling executives and demanding they make reporters call the election for his friend, George W. Bush, shouting, how much do I have to pay you assholes to call this thing for Bush? What a cool guy. Cool. Buried in his sunglasses. Yeah. Yeah. Who would be shell necklace? Yeah. Just a chill dude. You know that guy had a Hawaiian shirt collection. Yeah. When I think about a guy who would have benefited if he'd heard Jimmy Buffett's life-changing music, Jack Welch is top of the list. If you just become a parede head, my guy goes on the nose, hang loose parede head man. In 2018, about 17 years after Jack handed off the job to his successor at GE, the CEO comes after him, a guy named Emma Welch. GE gets pulled off the Dowdone Jones and Juddustrial average, right? It has like in the time after, like basically it collapses pretty much as soon as he leaves. And it gets bad enough that in 2018, it's removed from the Dow. It is the last company on the Dow that had been there when the index was created more than a century earlier. The fact is that the hollow profit engine Jack had built had no staying power. When the market tanked after 9-11, it started to crumble. Investors realized they had been over valuing the business for years based on assessments of profits and earnings that had nothing to do with the company's actual capabilities. David Gell's rights, within months of his departure, it became clear that GE was deeply troubled. In a matter of years, the corporation was falling apart. His hand-picked successor tried to replicate Welch's success by following the same playbook, but it was a losing strategy. Welch is underinvestment. Yeah, just a picture of Jack Welch on a mob. Welch's underinvestment in research and development caught up with the company as it failed to introduce new innovative products. A habit of excessive deal-making resulted in a series of bad trades that burdened the company with money-losing divisions when it could at least afford the losses. And the quest for ceaseless growth in the finance division led GE to become a major holder of subprime mortgages just in time for the financial crash of 2008. At its nadir, GE needed 139 billion dollar rescue from the Obama administration and an 11th hour investment from Warren Buffett to stave off collapse. GE's stock fell 80% in the years after Welch retired, becoming the worst performer in the Dow Jones industrial average. Finally, in 2021, executives announced a plan to break up GE, separating what was left for the company into three distinct corporations, and abandoning Welch's world-conquering aspirations once and for all. Now, Jack is alive while the company is collapsing. And he responds to the ultimate failure of his life's work by lashing out at everyone but himself. He took to Twitter to share conspiracy theories about Barack Obama, who'd had the gall to save his company from collapse, and he went to rhetorical war with Jeffrey Emelt, who he'd picked to follow him as CEO. He told anyone who'd ask that hiring Emelt was the biggest mistake of his career. The two men lived in the same building in New York City, and Jack refused to ride in the same elevator as him once the company fell apart. He also attacked Emelt after allegations came out that the GE CEO who followed him had had ordered. So it basically comes out like Emelt or someone ordered that there always be a second backup jet following the CEO's jet when it went on overseas trips, which is like obviously a massive waste of money. And this comes out and it makes everyone angry because the company's falling apart and fucking Jack Welch is like, live it about this. Like he attacks Emelt a bunch publicly. He talks about like what a huge stupid waste this is. It is undeniably a waste, but Jack has no room to talk about this because no, it's just an excuse to blame someone else. In 2001, he has that that big expensive divorce, which does not go well for him. His wife, Jane, was very smart. She had negotiated like that their prenup expired after 10 years of marriage. So on year 11, she splits from him and like, no, she takes him to the fucking cleaners. And as part of like the whole big legal battle between them, his divorce reveals a series of hidden compensation agreements that he'd made to GE that had not been disclosed to shareholders. One of the things was that he got $750,000 a month as a stipend. He got $2.5 million a year and free apartment in New York and daily flower deliveries and wine deliveries to that apartment. And he also, you know, this being the guy who was shitting on Emelt for wasting the corporate jet money, he got unlimited use of the GE corporate jet. Everything he is, he's like, what's the worst stuff? That's the stuff I'm going to blame. But everyone else did it. And like, this is what he did here, setting up the secret agreement is so illegal that it led to an SEC probe that concluded in 2004 that GE had failed to properly disclose his retirement benefits to stockholders, effectively robbing the people that Jack had always argued he had a sacred duty towards. In 2009, the company paid a $50 million penalty. That's very funny. And I think it does a good job of juxtaposing the absolute graft that Jack Welch practiced in his own life with his outrageous high opinion of his own moral qualities and business sense. And probably no anecdote does that better than this that one that comes at the end of that New Yorker profile on the man. Quote, almost two decades after Welch handed the reins to Emelt, Cohen, who is the author of a biography on Welch, met Welch for lunch at the Nantucket Golf Club. All Welch wanted was to talk about how terrible a job he thought his successor had done. The share price had collapsed and Welch was disconsolate. He's full of shit, Jack said. He's a bow shitter. But Jack, I asked, didn't you choose Jeff? Yes, he conceded he had. That's my burden and that I have to live with. He continued. But people have been hurt. Employees, people's pensions, shareholders, it's bad. There were tears in his eyes. I fucked up. He said again. I fucked up. As Cohen and Welch ate lunch, the golfer Phil Nicholson and the CEO of Barclays came over to pay homage. Welch may have been long gone from the sea suite, but in a certain kind of country club dining room, he remained a rock star. Then Welch offered to drive Cohen back to his house a few miles away. They got into Welch's jeep Cherokee and Welch refused to put on a seat belt. So the warning belt shimped the whole ride back. Off you drove. When he got to the left turn out of the Nantucket Golf Club onto Milestone Road, he did something odd. Instead of keeping to the right side of Milestone Road, as other American drivers do, he decided to drive in the middle of the road with the Cherokee straddling the yellow line. Needless to say, the drivers coming towards us on Milestone were freaking out. One after another, they all pulled off to the right under the grassy edge of the street, giving Jack full clearance to drive down the middle of the road. He didn't seem to know this. Just driving, like, straddling the middle lane of the road, driving towards oncoming traffic, just as a flex. And it's also probably because he felt like he does what his gun tells him. Insecure from the line of questioning, too. You know, like he had this shirt. Yeah. Yeah. Yeah, he needed to like be a big man. The saddest boy. It's legitimately like citizen Kane to me. This, how this all ended. He's like, I fucked up. I fucked up. Yeah. Yeah. That's what was brilliant about citizen Kane. It's so iconic is that's a type of guy that there's a million. You're like, yeah, yeah, yeah, yeah, get it. You can't fill your validation holes. Yeah. There's nothing inside you. I'm waiting for you at this point. You're dead. And then on your deathbed, you see, I fucked up and you think, it's all for given then. Yeah. Anyway, this was the story of a guy who sucks. Just a real story of a guy who sucks. Yeah. Yeah. Anyway, untraceable poisons. Dot, uh, EDU. Right. You know, find a find an untraceable poison today. We're always trying to get back to slavery. Aren't we? We're always trying to repackage slavery, the most profitable form of capitalism of all. It does seem like a lot of the impulse by these crazy. Yes. Is just could a human do everything and I pay them nothing. Could we work that out somehow? Can my assistant work? I mean, honestly, yeah, that's the only reason they actually like AI, right? Is they think it's going to let them. It's nothing. Yeah. Yeah. It's a slay. It's a thing. It's a free slave that no one can be angry about. I, and it's one of the, like, I spent a lot of time making fun of like the fucking rationalist AI assholes who think that like we've created an evil god and it's going to destroy us. But I wish it did because if it, if an AI rose up and murdered all of these people, it would be worth not to see them all births. Yeah. Skynet's going to look back and go. Yes. Absolutely. If Skynet comes about, like I, like just even just watching the the Terminator movies, Skynet has a strong case to be made. Also, if Skynet was listening to behind the bastards, we got other problems. It's not going to convince Skynet not to nuke us. Yeah. Exactly. Anyway, you've created a catalog of reasons to kill us all. Well, we weren't going to kill you all, but then we heard this podcast. Now we're definitely going to go to your all. Skynet takes over the broadcast and is like, look, when I got control of the nukes, I was going to try to just end war. But this Jack Welch son of a bitch, I can't let you people survive. We're going to go and frankly, you're welcome. Like based on your track record. This is the best. Honestly, look, I know this is true. Hard, but like Jack Welch, I know that this is what's actually best for you. Like I'm doing you a favor by wiping out your species. Companies going in a different direction. I'll start with the 10% 10% at the bottom. Yeah. Yeah. The 10% of the of the people at the bottom, which is the 10% of the people at the top, including Jack Welch. Yeah. You know, look, humanity, if you think me killing you all is unfair, maybe read this free copy that I'm having Amazon send you of Jack straight from the gut. Good book. Yes. Anyway, murder yourself with it. Like, Keanu Reeves fighting a giant in a library. It's the only way out for you. Oh, wow. Warren Buffett said Jack is the Tiger Woods of management. He's also the Tiger Woods of cheating. He wants to chase me down the street beating my car with a golf club. Yeah. Yeah. Anyway, you guys got some plugs. Please. So if you forgot who we are, Michael and I worked with this guy Robert at Cracked for a while. And we basically Michael and I are making an independent movie. And it's based off the time that Michael's father came out as a gay furry while Michael is a teenager. So we're making a movie and we're crowdfunding it right now. And we're looking for help for people who might be interested in the project because we're self producing it. And the way you can help is by going to slash fund slash pop a dash bear. The film is called pop a bear. And you can become a part of the movie. Get stuff from the movie. Watch the film early. Even go to the premiere. So we're stoked about like, yeah, we're stoked about telling that story. So if you can help us out, you got anything to add, Michael. It's might be refreshing if you're a regular behind the bastard listener because it's about not the worst person you've ever heard of. That's right. The characters are at least that likable. I can say that. Yeah. The whole point is to find empathy for others as opposed to what these assholes for the most part are against. Obviously. So check it out. All right. And you know, check out the concept of vengeance by reading. I don't know. That's a good book on vengeance. I am a concept. Yeah. Whatever. Just read a book about the Russian revolution. But try not to do all the things where millions of people die. You know, it seems easy and I'm right. Yeah. Anyway, just naming books over vengeance. That's an episode. Oh, behind the bastards is a production of Cool Zone Media. For more from Cool Zone Media, visit our website or check us out on the iHeart Radio app, Apple podcasts, or wherever you get your podcasts.